Market Snapshot July 28, 2009, 2:25PM EST

Stocks End Mixed on Earnings, Confidence News

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The S&P/Case-Shiller home price index rose 0.45% to 139.8 in May for the 20-city index, from 139.2 in April. On a year-over-year basis, the index was down 17.1%, not as bad as the 18.1% decline from April. The 10-city index rose 0.41% to 151.0 from a revised 150.4 (was 150.3). Six cities posted declines, paced by a 2.58% drop in home prices in Las Vegas. Phoenix was next with a 0.85% dip. Fourteen cities posted gains, paced by Cleveland with a 4.12% increase.

The Wall Street Journal reported Bank of America CEO Kenneth Lewis told investors last week he is planning to shrink the company's 6,100-branch network by about 10%, a pullback from the two-decade expansion that took the bank from coast to coast. Lewis discussed the plans during a meeting Thursday in the bank's hometown of Charlotte, N.C., according to people familiar with the conversation. Liam McGee, president of Bank of America's consumer and small-business bank, also said branch closures are in the works but added it would be premature to specify how many locations could be closed, these people said.

San Francisco Federal Reserve Bank President Janet Yellen said she is seeing the "first solid signs" of the end of the recession. She said growth may resume this year, while house price declines seem to be abating. But, she said the recovery may be "painfully slow." Her biggest concern now is the commercial real estate market. On inflation, she said she believes core inflation may hold below 2% for several years. And she doubted the expansion in the Fed's balance sheet will fuel inflation.

One of the Federal Reserve's most inflation-wary officials said on Monday the U.S. central bank may have to start raising interest rates even while the unemployment rate is still high to prevent price pressures from getting out of hand. "I think we will probably have to begin raising rates sometime in the not-too-distant future," Philadelphia Fed President Charles Plosser said in an interview published on the Wall Street Journal Website.

Bloomberg News reports Treasury Secretary Timothy Geithner pledged to rein in the U.S. deficit as China underscored concern about preserving the value of its $801.5 billion of Treasury holdings. The U.S. will ensure a "sustainable" deficit by 2013, Geithner said at the beginning of the first round of Strategic and Economic Dialogue talks under President Barack Obama in Washington.

The Associated Press reports a bipartisan group of senators is closing in on a health care compromise that omits key Democratic priorities but seeks to hold down costs, as lawmakers on both sides of the Capitol labor to deliver sweeping health legislation to President Obama. Separately, the Journal reports prospects dimmed for getting a full House vote on a consensus health-care bill this week, despite stepped-up efforts Monday by Democratic leaders in the chamber.